When it comes to TVL, transcations and active users, Arbitrum has witnessed a 5x increase in the last one year. Despite that fact, when it comes to building application specific roll-up solutions, Op Stack, StarkX, and others  have provided tough competition to the Arbitrum ecosystem. But that narrative is going to change in 2024 after the introduction of Arbitrum Orbit. In this piece, we will deep dive to understand what Arbitrum Orbit is going to do to completely change the rollup ecosystem. 

What is Arbitrum Orbit? 

Arbitrum Orbit, is a new roll-up offering by the Arbitrum Foundation that helps business specific use-cases to  create their own self-managed roll-up or trust chain. This helps  in creating their ecosystem without compromising the flexibility while inheriting the decentralization and security of the base chain.  

In addition to this, when applications are developed on top of Arbitrum Orbit, they enjoy fully functional fraud -proof,  advanced compression and EVM compatibility as a separate Arbitrum Orbit roll-up chain which make the Arbitrum Orbit roll-up ecosystem sound like a traditional L2 but with the trade -off of adjusting as per your business specific requirements. 

What Problem Arbitrum Orbit Solves?

Fraud Proof Validation

Enterprise applications aspire  for mass level adoption in the blockchain space but in order to do that, these applications have to go by the rule set by the base layer. For example, they will have to use the same programming language which is compatible with the base layer to enjoy its decentralization and security. However, the problem is that if they wish to do that, they will have to compromise on  flexibility of throughput/scalability, privacy,  or gas token, and governance.

Arbitrum Orbit is helping negate that through the Stylus EVM upgrade. What Stylus EVM does is let developers write codes in their own programming language like Rust, C, C++, and many others. For the purpose of proof generation, the Stylus EVM uses a second Virtual Machines Execution WASM, instead of the EVM bytecodes. This makes proof generation and validation faster and cheaper in comparison to an EVM proof generation. 

And post the introduction of the Nitro Upgrade, it is now possible to compile down any language which are within the ambit of the Stylus to create verifiable fraud proofs because whenever any dispute happens on the Arbitrum chain, Nitro will replay the execution of the chains in the WASM and it will be the onus of the honest Arbitrum validators to bisect all the transcations and  trace the single unidentified transaction. Thereafter, they will check on-chain via a one step proof. Hence, through the use of Nitro, arbitrary WASM fraud proof validation is possible, which is not just faster but cheaper at the same time to scale the ecosystem. 

DAO for Upgradeability & Control 

In a traditional roll-up environment, it is not easy to create your own child chains. But Arbitrum Orbit provides that flexibility through Arbitrum DAO where applications can create their own chain in a truly permissionless manner through a customization fork of Arbitrum Nitro Codebase. As a result, such chains have the advantage of defining their own novel governance structure. 

Security, Composability and Customization 

For the purpose of driving security, composability and customization, the Arbitrum Orbit ecosystem allow the rollups to use any DA layer like Celestia or Near through the Nitro Tech stack to settle the transcations on Arbitrum One, Arbitrum Nova, or Ethereum Mainnet as per the need of the project. Introduction of the AnyTrust protocols provide complete customization from the standpoint of privacy, gas token, and governance to suit the specific need of the project without compromising the security because the child chain inherits the security of the Arbitrum L2 chain, which inherits the security of the base L1/Ethereum chain. 

Improvising Sequencing

Arbitrum Orbit introduces deterministic sequencing  in which the Nitro will take the source code of the sequencing once and it will compile the same twice, one for the native rollup state and the other for the WASM used for proving. The trade-off of such a practice is that the sequencer sets will only consider valid sequencing transactions and eliminate invalid ones. Thereby, saving the time and keeping- the fees low because any spam transactions will not be considered in the first place because the ecosystem uses hierarchical deterministic sequencing execution. 

What is the Operational Model of Arbitrum Orbit?

Arbitrum Orbit uses the following technology architecture to help build the rollup of your choice as per your specific use-cases; 

Arbitrum Rollup

Arbitrum Rollups settles on Arbitrum One, the public chain. It sends proofs to Ethereum. So better decentralization. Through this Arbitrum Rollup chain, an application  can do everything that it intends to do on the Ethereum base layer like use Web 3 apps and deploy smart-contracts. But the only key difference will be that on Arbitrum rollup, the transactions will be 5x to 10x cheaper than what you experience on an ETH L1. However, the only downside of this practice is that when you are using the Arbitrum Rollup, though you get the scalability but it is not in tune with infinite scalability that you might need for some of your application because the posting of the fraud proof is on L1, which might significantly increase the transaction cost when compared to AnyTrust Chains. 

Arbitrum AnyTrust Chain 

For AnyTrust you settle on Arbitrum Nova, another public chain of Arbitrum. With the help of the AnyTrust Chain, the reliability of data posting shifts to a DAC instead of the L1 chain. In this DAC, there are N number of members, and as long as N-1 members remain honest, the chain will function.  As a result, the network is always secure before the participants who act as the members are unknown to each other and for a network attack to happen, it should build a syndicate of partners to corrupt the network. 

Nitro core

In the erstwhile set-up of Arbitrum, which was Arbitrum Classic, a custom virtual machine was in place which was in equivalence with the EVM. Hence, other programming languages could operate on top of the ARBOS or Arbitrum Virtual Machine. But post the introduction of the Nitro Core, now the Arbitrum AVM uses WASM instead of AVM and now it is possible to compile Go with WASM and this has significantly increased the proximity of operation across a wide range of languages. 

How These Trade-offs Impact the Dapp Environment?

Getting Dedicated Throughput 

As an enterprise, suppose if you are running a gaming Dapp, you might require very high throughput and lower gas fees or near zero fees. With the help of the Arbitrum Orbit, you can very well achieve the same because in the Arbitrum Roll-Up ecosystem, you will have a dedicated computational resource earmarked for your own application which will significantly impact the throughput. However, you cannot receive such a trade-off in a traditional roll-up environment because there will be competition for the sequencer sets and computation which might affect the UX of your application. 

Greater Compatibility 

While developing applications, one of the greatest drawbacks is whether your application will be EVM compatible or not. Because, in case, if it is not EVM compatible, it would build walled gardens around your application. Arbitrum Orbit resolves this through the introduction of Stylus. With the help of Stylus, you can deploy EVM turing smart-contracts using Solidity, RUST and C++. For the first time, the enterprise applications need not have to migrate to  a new language or a toolchain to develop their roll-up solution for their application or use-cases. 

Gas Price Reliability 

The problem of launching your application on a shared rollup ecosystem is getting disturbed by noisy neighbors. However, such an equation changes when you have Arbitrum Orbit to help you. Arbitrum Orbit isolates your application from the L2 chain  and Ethereum, as a result, other network activity doesn’t affect the gas prices on your ecosystem and your users can continuously enjoy a standard gas pricing motivating them to stick to the ecosystem for long. 

Permissioned Access 

Dapps need the freedom to choose between whether to keep the information private for all or make it public. Through Arbitrum Orbit, these applications can have the discretion of either keeping the contracts open or permissionless or they can choose to keep them private as per their project requirements. 

Security 

Security is the crux of everything when you are hosting a whole new ecosystem on your Dapp. Through Arbitrum Orbit, your application inherits the security of the Arbitrum L2 chain because all the transactions are settled on the Arbitrum L2, which inherits the security of the base Ethereum chain. 

Use cases On Arbitrum Orbit 

Gaming 

Arbitrum Orbit has been used to build the XAI blockchain that addresses the need for Web 3 gaming which require specific dedicated throughput and scalability to support a sustainable ecosystem. 

NFT Marketplaces

For the NFT market to scale, it must provide near zero gas fee advantage. The Rari chain is developed using the Arbitrum Orbit Stack which provides exceptional speed to the NFT marketplace for sustaining the next generation of NFT adoption. 

DeFi

Arbitrum Orbit is also helping DeFi scale with custom gas tokens to help DeFi Dapps scale. Kinto is the latest addition on the Arbitrum Orbit’s cap which is helping support both financial institutions and decentralized protocols to interconnect and communicate with each other for the next level of DeCeFi adoption. 

Key Projects Built Using Arbitrum Orbit 

How Zeeve Can Help Launch Arbitrum Orbit Chains? 

Zeeve has expanded it's RaaS offerings and now offers Arbitrum Orbit Compatibility. Developers can build their custom tailored Orbit chains with Custom DA, custom VM, custom gas token, custom privacy, custom governance and everything with the enterprise-grade Zeeve platform. 

Our range of integration partners also augment the power of your Arbitrum Rollups with additional functionalities including Alt Data Availability, Sequencers, decentralized oracles, account abstraction  SDks and other tools. All these are available as a pluggable component through the Zeeve Rollups-as-a-service platform. 

Apart from these you get full provisioning (Block explorers, faucets, data indexers, bridges etc) along with enterprise SLA and 99.9% uptime guarantee. 

If you are planning to launch your own rollups, don't hesitate to reach out to us. Our experts can help you identify the best infrastructure suitable for your use case. Schedule a call today!